Propane in line to benefit from emissions-violations settlements

The propane industry has been sending letters to states regarding their Volkswagen settlement mitigation plans and pushing propane’s benefits as a transportation fuel, especially for school buses. Photo by Bob Yosay/The Vindicator

EPA’s settlements with Volkswagen (VW) totaling billions of dollars and resolving emissions-test cheating allegations could have far-reaching impacts on the propane industry.

“It’s time for the industry to mobilize and make their case,” says PERC COO Tucker Perkins. “The EV [electric vehicle] guys want it all; the natural gas guys want it all; the diesel guys want it all. This is a competitive fight.”

Adds Blossman Gas President and NPGA Chairman Stuart Weidie of propane’s EV competitors, “They are going to bury us if we don’t get on this.”

The fight began over a year ago when EPA alleged that VW equipped hundreds of thousands of diesel vehicles sold in the United States with software that enables them to perform differently during emissions tests. As part of the settlements with EPA, VW agreed to fund trusts that would help mitigate the environmental impacts associated with the emissions violations.

Of importance to the propane industry, an environmental mitigation trust fund makes $2.7 billion available for eligible vehicle projects that reduce nitrogen oxide (NOx) emissions. Projects in line for replacement include heavy-duty diesel sources near population centers, such as large delivery trucks and service ports; school and transit buses; and freight switching railroad locomotives. The funds are allocated based on the number of registered illegal vehicles within the boundaries of the beneficiary, EPA says. The range is from $7.5 million available in a handful of states to $381 million in California.

“Propane offers the best opportunity they will see to reduce their NOx emissions at the lowest cost possible,” Perkins says. “It’s not just important to get our slice; it’s time to make the point propane is the case for today.”

But the clock is ticking, says Matt Bisenius, director of legislative affairs at NPGA.

Talking points

The national association began talking to state leaders about the VW issue last fall and ramped up those efforts following the winter board meeting earlier this year in San Antonio.

NPGA members in each state now have the ability to submit a letter to state officials electronically. The letter highlights propane’s role as a transportation fuel and explains why the fuel should serve as a key part of that state’s VW settlement mitigation plan. The industry is placing an emphasis on propane-fueled school buses.

“Each state has the authority to come up with how that money will be spent under the parameters of that settlement,” Bisenius says. “We’re developing tools that can be tailored to each state on how the money should be spent.”

NPGA created the letter and targeted key contacts in each state that it believes will have a say in each respective plan. Industry members only need to submit an online form to show their support for propane. You can visit http://conta.cc/2kxmiLb.

“We have 3,000 [marketer] members who can make this pitch in every state,” Bisenius says.

But are they showing enough aggressiveness? Phil Squair, senior vice president of public and governmental affairs at NPGA, isn’t so sure. He says the propane industry must step up and sell state officials on the benefits of propane.

“It’s been a bit of a surprise that there hasn’t been more interest expressed or a willingness to say ‘That’s a cool opportunity to do something in this area,’ so we’re going back at it, heavier on the grassroots,” he says.

Where the process goes from here depends on when a trustee is selected for the fund, Bisenius says. Once that happens in each state, certified beneficiaries can set up mitigation plans and become eligible to receive funds. What will it mean for propane?

“Here’s our opportunity to dip into the pie and grow some volume across the board,” Weidie says.